French elections: Gambler Macron takes kingmaker role | World News

The results of France’s hastily organised parliamentary runoff elections showed voters giving a firm “no” to Marine Le Pen’s far-right Rally National party, while giving only hesitant “maybes” to its left-wing and centre rivals. As President Macron prepares to bring together the Greens and Socialists, there are faint signs of moving closer to Keir Starmer’s path in the UK, but it will not be easy. And there is a big risk that the eurozone’s second-largest economy will continue to be divided in politics.

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At the top of the ticket, the situation is much less clear: Mr Macron’s centrist coalition is projected to come in second with 163 seats, still far short of the 289 needed for a majority. Strategic voting has limited the damage, but Mr Macron remains unpopular, even his own camp feels betrayed, and he no longer has the political capital to force through reforms.

Still, he managed to keep his coalition in the game as a potential partner in a coalition government. In the end, the victorious left-wing coalition, with policies clearly influenced by firebrand Jean-Luc Mélenchon, won just 182 seats, short of a majority.

In other words, Macron will likely turn from king to king and look to the left rather than the right for his first chance at a coalition. Financial markets will no doubt be relieved that no party has the freedom to implement the most unrealistic and costly policies, and may be forced to change their mind. What initially seemed like a Giorgia Meloni scenario for the French far right could become a Starmer scenario for the French far left. Just as the Labour Party became more electable after ousting Jeremy Corbyn, the Popular Front’s way to power may be to part ways with Mélenchon and form a more centrist coalition. Macron’s group, the Greens and the Socialists combined, could get quite close to 289 seats.

All this carries risks: even a successful imitation of Starmerism would not yield the large majorities his party currently enjoys, and whatever coalition government is ultimately formed would take time and risk a level of political fragmentation virtually unprecedented in the history of the Fifth Republic.

That would mean tough decisions like raising taxes at a time when budget deficits are soaring and growth trajectory is below the euro zone average, leaving little room to tackle deeper problems like productivity, innovation and a declining population.Christopher Dembick, a strategist at Pictet Asset Management, also expects a coalition government to weaken some of the impact of Macron’s reforms, from pensions to welfare payments.

For now, there is an audible sigh that the European Union’s second-largest economy has decided to shelve the right-wing populist “era.” But what happens next could be far more volatile. With just three years until the presidential election, and Le Pen relishing the chance to continue to attack Macron from an opposition seat, France is far from returning to normal.

Disclaimer: This is a Bloomberg Opinion article and the opinions expressed are those of the author. They do not necessarily reflect the views of www.business-standard.com or the Business Standard newspaper.